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Export management ppt

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Amarayya Hiremath MBA Gulbarga University Gulbarga Dept of Management

Published in: Business
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Export management ppt

  1. 1. 12-1Exportmanagement
  2. 2. • Export management means conducting theexport activity in an orderly, efficient andprofitable manner.• Since the heart of each business is marketing,export management can be termed as exportmarketing management. Because it needs to bemanaged efficiently so that the export shouldincrease and exporter should get more profit andimporter should get more satisfaction.• Export management means managing exportmarketing activity efficiently, smoothly and in anorderly manner.Export management
  3. 3. We can discuss the need for exportmanagement at two different levels.(A) At the National level.(B) At the Business level.NEED FOR EXPORT MANAGEMENT
  4. 4. Need For Export Management At The NationalLevelEarning foreign ExchangeInternational RelationsBalance of paymentsEconomic GrowthReputation in the WorldEmploymentResearch and DevelopmentStandard of Living
  5. 5. 12-5Export ObligationHigher ProfitsReputation and GoodwillImports are liberalizedGovernment IncentivesNeed Export management At Business Level
  6. 6. Export management1. Identifying Export Products2. Market Selection3. SWOT Analysis4. Export License5. Export Pricing and Costing6. Understanding of Foreign Exchange Rates7. Export Risk Management8. Packing and Labeling of Goods
  7. 7. 1. Identifying Export Products• The product should be manufactured or sourced with consistentstandard quality, comparable to your competitors• If possible, avoid products which are monopoly of one or few suppliers• The price of the exported product should not fluctuate very often -threatening profitability to the export business.• Strictly check the government policies related to the export of aparticular product• Carefully study the various government incentive schemes and taxexemption like duty drawback and DEPB.• Seasonal vagaries of selected products• Keep in mind special packaging and labeling requirements ofperishable products like processed food and dairy products.12-7
  8. 8. 2. Market Selection Market selection process requires a broad range of informationdepending upon the products or services to be exported, whichincludes:• The demand for product/service.• The size of the potential audience.• Whether the target audience can afford product.• What the regulatory issues are that impact on exports of product.• Are there appropriate distribution channels for product/service?• The environment for doing business – language, culture, politicsetc.• Is it financially viable to export to selected market?12-8
  9. 9. 3. SWOT Analysis• SWOT analysis is a useful method ofsummaries all the information generatedduring the export planning. SWOT standsfor strengths, weakness, opportunitiesand threats, which helps to isolate thestrong and week areas within an exportstrategy. SWOT also indicates the futureopportunities or threats that may exist inthe chosen markets and is instrumental instrategy formulation and selection.12-9
  10. 10. 4. Export License• Export license are only issued forthe goods mentioned in theSchedule 2 of ITC (HS)Classifications of Export and Importitems.12-10
  11. 11. 5. Export Pricing and CostingExport Pricing can be determined by the following factors:• Range of products offered.• Prompt deliveries and continuity in supply.• After-sales service in products like machine tools, consumerdurables.• Product differentiation and brand image.• Frequency of purchase.• Presumed relationship between quality and price.• Specialty value goods and gift items.• Credit offered.• Aggressive marketing and sales promotion.• Unique value goods and gift items.
  12. 12. Export Costing• Export Costing is basically CostAccountants job. It consists of fixed costand variable cost comprising variouselements. It is advisable to prepare anexport costing sheet for every exportproduct.12-12
  13. 13. 6. Understanding of ForeignExchange RatesAn exporter without any commercial contract iscompletely exposed of foreign exchange risks that arisesdue to the probability of an adverse change in exchangerates.Therefore, it becomes important for the exporter to gainsome knowledge about the foreign exchange rates,quoting of exchange rates and various factorsdetermining the exchange rates.• Rate at which one country’s currency is exchanged foranother country’s• Has become a major concern for companies doingbusiness internationally• Changes in the exchange rate can have majorimplications for profitability of international operations12-13
  14. 14. 7. Export Risk ManagementThe various types of export risks involvein an international trade are as follow• Credit Risk• Poor Quality Risk• Transportation Risks• Logistic Risk• Legal Risks• Political Risk• Unforeseen Risks• Exchange Rate Risks
  15. 15. 8. Packing and Labeling Of GoodsPackingThe primary role of packagingis to contain, protect andpreserve a product as well asaid in its handling and finalpresentation.Packaging provides followingbenefits• Physical Protection• Containment• Marketing• SecurityLabelingLabeling on product providesthe following importantinformation:• Shippers mark• Country of origin• Weight marking (in poundsand in kilograms)• Number of packages and sizeof cases (in inches andcentimeters)• Handling marks (internationalpictorial symbols)
  16. 16. Tools used to aid transactionsLetters of Credit (LOC)Bank guarantee on behalf of importer toexporter assuring payment when exporterpresents specified documentsDrafts (Bill of Exchange)Written order exporter, telling an importer topay a specified amount of money at aspecified timeBill of LadingIssued to exporter, by carrier. Serves asreceipt, contract and document of title
  17. 17. Letter of Credit ModelExhibit 5.6ExportersellerbeneficiaryImporter’sbankImporterbuyeraccountpartyExporter’sbank7. Remits payment6. Presents documents4. Advises of L/C2. L/C application10. Sends documents11. Pays bank or gets loanIndiaOverseas5.Shipmentofgoods1.Purchaseandagreement9.Remitspayment8.Presentsdocumentsfornegotiation3.OpensL/C
  18. 18. • Export Import Policy or better known as Exim Policy is aset of guidelines and instructions related to the import andexport of goods. The Government of India notifies theExim Policy for a period of five years . The Export ImportPolicy is updated every year on the 31st of March and themodifications, improvements and new schemes becomeeffective from 1st April of every year. All types of changesor modifications related to the Exim Policy is normallyannounced by the Union Minister of Commerce andIndustry who coordinates with the Ministry of Finance, theDirectorate General of Foreign Trade and its network ofregional offices.Export Import (Exim) Policy
  19. 19. Foreign Exchange ManagementAct (FEMA)• Foreign Exchange ManagementAct or in short (FEMA) is an act thatprovides guidelines for the free flowof foreign exchange in India. It hasbrought a new management regimeof foreign exchange consistent withthe emerging frame work of theWorld Trade Organization (WTO).12-19
  20. 20. EXPORT FINANCE• Commercial banks• EXPORT-IMPORT BANK OF INDIA(EXIM BANK)• Export Credit and GuaranteeCorporation of India Ltd. (ECGC)12-20

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